We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Surge Energy Inc. (TSE:SGY), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
The Last 12 Months Of Insider Transactions At Surge Energy
Over the last year, we can see that the biggest insider purchase was by President Paul Colborne for CA$148k worth of shares, at about CA$2.72 per share. That means that an insider was happy to buy shares at above the current price of CA$1.52. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. To us, it’s very important to consider the price insiders pay for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months insiders purchased 715k shares for CA$1.5m. But insiders sold 22805 shares worth CA$51k. In the last twelve months there was more buying than selling by Surge Energy insiders. The average buy price was around CA$2.11. I’d consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders at Surge Energy Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Surge Energy. Not only was there no selling that we can see, but they collectively bought CA$119k worth of shares. This is a positive in our book as it implies some confidence.
Does Surge Energy Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Surge Energy insiders own about CA$17m worth of shares. That equates to 3.7% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Surge Energy Insiders?
It’s certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Surge Energy insiders are well aligned, and that they may think the share price is too low. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Surge Energy.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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